The Supreme Court's Judicial Activism role in Campaign Finance Reform

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Tue Apr 29, 2014 13:53:05PM

Supreme Court Building
In my previous blog article, Campaign Finance Reform going nowhere fast, I covered the wave of spending that followed the Supreme Court's 2010 Citizens United versus FEC decision. This article is a chronological history of judicial activism by the Supreme Court in using the "free speech" clause of the 1st Amendment to essentially gut campaign finance laws and tilt the playing field during the campaigning for elections in favor of big money interests including corporations. While the court has relied heavily on the 1st Amendment "free speech" clause in overturning legislation, fair minded activists opposed to the court's rulings are largely focusing on the 14th Amendment and corporate personhood...that "corporations are not people." However, I will confine this article to the Supreme Court's judicial activism as it pertains to Campaign Finance Reform.

1788: The US Constitution Ratified: First, an important point for all the Constitutionalists to understand is that the United States Constitution does not grant corporations any rights whatsoever. As the framers intended, there is no mention of corporations anywhere in that document or in any of its subsequent 27 Amendments. In reading some of the debated opinions during the framing of the Constitution, it is not an error of omission.

1819: Corporation Defined: In the Supreme Court's opinion in Trustees of Dartmouth College v. Woodward, Justice John Marshall for the first time described a corporation under federal law:

“A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence."

Robert Hessen, a senior research fellow at the Hoover Institution, writes that "Marshall's definition is useless because it is a metaphor; it makes a corporation a judicial hallucination."

1868: 14th Amendment: A half a century later, the 14th Amendment to the Constitution was ratified. Section 1 of the 14th Amendment states: All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

Note that this amendment, likewise, makes no mention of corporations. However, I have bolded the word "person" in that last clause commonly referred to as the "equal protection clause" because some legal scholars note that it lacks the necessary specificity to be confined to an individual, and that it left the door open for a later court ruling to include corporations as having personhood. If the amendment had specified "natural person" instead of just simply "person", the 14th Amendment could not have been applied in later court decisions granting personhood to corporations. A more sinister view expressed by some is that this lack of "natural person" specificity was intentional by those in charge of carefully crafting the wording...kind of like the ALEC of today writing legislation.

1886: Santa Clara County v. Southern Pacific Railroad Company: While the 1819 case first defined a corporation, it wasn't until 67 years later that in this landmark case the Supreme Court was deemed to have held that the Fourteenth Amendment equal protection clause granted constitutional protections to corporations (artificial persons) as well as to natural persons, at least that was the legal precedent set without argument.

Thom Hartmann in his book, Unequal Protection, covers his extensive research into this case that first established "corporate personhood", and much of what I cover here is from his research. As Hartmann notes, the case was about a relatively minor tax assessment against the railway company that somehow found its way all the way to the Supreme Court. Somewhat puzzling, just moments before the Supreme Court rendered its opinion in the case, Chief Justice Morrison Remick Waite, pronounced: "The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of opinion that it does."

The actual arguments of the case had been heard 17 months earlier, and the official transcript of the Supreme Court decision revealed no opinions to the effect that corporations are equal to natural persons and not artificial persons, and no dissenting opinions to indicate that there was even serious arguments on the matter. So Justice Waite's statement was not relevant for the arguments or decision in the case, and his statement "we are all of the opinion it does" certainly contradicted established legal precedent that up until then did not recognize corporations as persons. So why did he feel compelled to say it?

After that court decision on the taxation issue was announced, the official Supreme Court reporter and former railroad president, Bancroft Davis, issued his customary summary interpretation (called a headnote) of the proceedings. Included in that headnote was his interpretation of Justice Waite's statement made before the court's rendering of the official opinion: "The defendant Corporations are persons within the intent of the clause in section 1 of the Fourteen Amendment to the Constitution of the United States, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws."

Davis's liberties in inserting his own worldview into the headnote is not without precedent as noted by Hartmann in exploring everything Davis had ever written. Nevertheless , the headnote brief had nothing to do with the actual court arguments regarding taxation and property rights of the railroad company. It was not only contrary to existing law, it was irrelevant to the arguments of the case, and probably was not even seen, let alone discussed or challenged by the other justices, because the headnote is not contained in the official court transcripts. Furthermore, headnotes supposedly do not carry any weight in law...they are not the official recorded court proceedings.

So one has to think about conspiracies when the headnote in that case was cited as legal precedent two years later in Pembina Consolidated Silver Mining Co. v. Pennsylvania and Minneapolis and St. Louis Railway v. Beckwith, both cases erroneously supporting the contention that corporations were persons under the equal protection clause of the Fourteenth Amendment to the Constitution.

Thus the brief assertion by a single Supreme Court judge at the beginning of the rendering of the opinion in the case and rewritten by a court recorder as a headnote without any serious arguments brought forth in the court's discussions, elevated corporations to the status of persons under the law. Although that error should have been corrected in the original brief, it was further compounded by lawyers and judges citing that case as precedent in later cases, essentially legalizing corporate personhood, perhaps forever.

That Supreme Court "non-decision" decision is seen as a black mark on the court by those within the legal profession that have knowledge of the case. Indeed, it is not widely known or advertized...after all, it is the court's "dirty laundry." For those interested in exploring this topic further, I highly recommend reading Thom Hartmann's book, Unequal Protection.

While corporate personhood now had a foothold in other aspects of the law, with respect to campaign finance laws, however, in the ensuing years and decades, the Supreme Court did not interject their opinions or seek to expand the corporate personhood distinction beyond the legislative Campaign Finance Acts established by Congress. That changed in 1976.

1976: Buckley v. Valeo: In this landmark case, the Supreme Court struck down parts of the Federal Elections Campaign Act of 1974 including provisions that limited expenditures by campaigns, individuals and groups, and by a candidate from personal funds. The court's decision was a recognition that money counts as speech, since "virtually all meaningful political communications in the modern setting involve the expenditure of money." The case was the first in a chain of decisions over the next 38 years that allowed corporations, organizations and rich individuals to use their money to influence elections.

In considering all the contested provisions of Buckley v. Valero, the court easily upheld the public financing option and caps on contributions, and though divided, also upheld the distinctions between spending and contributions as per the interpretation of the First Amendment "free speech" clause.

1990: Austin, Michigan Secretary of State v. Michigan Chamber of Commerce: This case was an exception to Buckley v. Valeo in that the court upheld, by a 7-3 majority, the Michigan Campaign Finance Act, which prohibited corporations from using their treasury money to make independent expenditures to support or oppose candidates in elections. The make -up of the Court at that time 14 years ago included Justice Stevens who supported the 7-3 majority decision that ruled in favor of the Michigan Secretary of State. The dissent opinion at the time included Justices Kennedy and Scalia.

2010: Citizens United versus the Federal Election Commission: Twenty years later, on January 20, 2010, Justices Scalia and Kennedy, supported now in their 5-4 majority decision by conservative Justices Thomas, Roberts and Alito, not only reversed the court's 1990 Austin, Michigan decision but also rolled back parts of McCain Feingold as restricting free speech. Essentially the court prohibited the government from restricting political independent expenditures by corporations, associations and labor unions. Justice Stevens was particularly incensed by the reversal on the Austin, Michigan case, and within his 90 page dissent he chastised the court for expanding the scope of the arguments beyond what was being specifically litigated in Citizens United.

Stevens writes somewhat sarcastically, "Our colleagues’ suggestion that “we are asked to reconsider Austin and, in effect, McConnell ,” ante , at 1, would be more accurate if rephrased to state that “we have asked ourselves” to reconsider those cases." Justice Scalia was instrumental in that reconsideration of Austin, Michigan.

In addition, Stevens dissent focused heavily on the role of corporations, as shown by these extracts from his dissent opinion:

"The conceit that corporations must be treated identically to natural persons in the political sphere is not only inaccurate but also inadequate to justify the Court’s disposition of this case.

"Congress has placed special limitations on campaign spending by corporations ever since the passage of the Tillman Act in 1907…The Court today rejects a century of history when it treats the distinction between corporate and individual campaign spending as an invidious novelty born of Austin v. Michigan Chamber of Commerce.

". . . corporations have no consciences, no beliefs, no feelings, no thoughts, no desires. Corporations help structure and facilitate the activities of human beings, to be sure, and their 'personhood' often serves as a useful legal fiction. But they are not themselves members of “We the People” by whom and for whom our Constitution was established.

Justice Stevens' statements have served as a rallying call by many activists to take money out of politics or more specifically to remove corporations from having the same Constitutional rights as natural persons. As many as 14 different resolutions to amend the Constitution have been proposed by House and Senate members of Congress to disallow corporations from making political contributions and also take away the "corporations are people" distinction. The process and implications of amending the Constitution introduces a whole new set of issues that will be covered in an other article.

2011: Arizona Free Enterprise PAC v. Bennett: On June 27, 2011, the Roberts Supreme Court made another egregious ruling (again 5-4) to throw out a provision of Arizona’s 13 year old well regarded public campaign financing system. The concept for matching funds in Arizona has several well documented positives that seemingly avoid the legal pitfalls of the free speech arguments...or so it seemed. Note that in 1976, an earlier Supreme Court in Buckley vs Valero upheld public financing as Constitutional. Times have changed and the make-up of the court has changed.

Justice Roberts wrote the majority opinion that the Arizona law was unconstitutional because it “plainly forces the privately financed candidate to ‘shoulder a special and potentially significant burden’ when choosing to exercise his First Amendment right to spend funds on behalf of his candidacy.” For many legal scholars including the ACLU, the Roberts opinion defied logic.

Justice Kagan didn't mince her words in writing the dissent: “Except in a world gone topsy-turvy, additional campaign speech and electoral competition is not a First Amendment injury... Arizona, remember, offers to support any person running for state office. Petitioners here refused that assistance. So they are making a novel argument: that Arizona violated their First Amendment rights by disbursing funds to other speakers even though they could have received (but chose to spurn) the same financial assistance. Some people might call that chutzpah.”

Justice Kagan's use of the word 'chutzpah' could apply to the audacity of other court rulings as well.

2014: McCutcheon vs the Federal Exchange Commission: By another narrow 5-4 majority, on April 2, 2014, the court struck down the parts of McCain - Feingold that limited the total amount that one wealthy donor is permitted to contribute to all federal candidates, parties, and political action committees (PACs) combined.

In defending the donors and constituents right to influence officials with unlimited money donations, Chief Justice Roberts writing the majority opinion stated that: “Government regulation may not target the general gratitude a candidate may feel toward those who support him or his allies, or the political access such support may afford. 'Ingratiation and access . . . are not corruption.' They embody a central feature of democracy—that constituents support candidates who share their beliefs and interests, and candidates who are elected can be expected to be respon¬sive to those concerns.”

Justice Breyer in dissent stated: “[This is] a decision that substitutes judges’ understandings of how the political process works for the understanding of Congress; that fails to recognize the difference between influence resting upon public opinion and influence bought by money alone; that overturns key precedent; that creates huge loopholes in the law; and that undermines, perhaps devastates, what remains of campaign finance reform.”

Breyer adds: “Taken together with Citizens United v. Federal Election Commission, 558 U. S. 310 (2010), today’s decision eviscerates our Nation’s campaign finance laws, leaving a remnant incapable of dealing with the grave problems of democratic legitimacy that those laws were intended to resolve.”

Justice Breyer's words are a testament to just how far the court has shifted to the right and exercised judicial activism in broadening the application of free speech and corporate personhood to effectively remake law or repeal law even when it was outside the scope of the cases being brought before the court.

In summary, from 1787 to 2014, we went from zero recognition of First Amendment rights for corporations to an array of Supreme Court decisions that virtually allow unlimited funding of candidates and issues by individuals, corporations and organizations as protected "free speech".

What's next for the Supreme Court...declaring that corporations as "persons" can also exercise and force their religious beliefs on employees as a part of the First Amendment, Establishment clause?

I'll cover additional aspects related to Campaign Finance Reform and Election Reform in other articles as we lead up to the November 2014 election.
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